Federal Reserve Rate Decisions Impact Markets

The Federal Reserve's recent decision to lower interest rates by 25 basis points was accompanied by a more cautious outlook that surprised market participants. The Fed signaled an expectation of only two more rate cuts in the coming year, rather than the three previously anticipated, leading to a significant sell-off in the stock market. Major indices like the Dow and S&P experienced substantial declines, with the Dow facing its longest losing streak since 1974. The shift in tone regarding future rate cuts raised concerns among investors about the overall economic outlook and inflation expectations.